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Vale S.A. (VALE)

- NYSE
  • Dec. 5, 2014, 11:28 AM
    • Japan's Mitsui is set to buy a 15% stake in Vale's (VALE -0.6%) Moatize coal project in Mozambique for ~$450M, Reuters reports.
    • Moatize, one of the largest metallurgical coal mines in the world, is considered Vale's best asset in its coal portfolio, but it has not been an easy market in which to find a buyer as coal prices have declined steadily for more than three years.
    • Mitsui also may take a 50% stake in the project's rail and port, on condition of contributions to future capex costs.
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  • Dec. 4, 2014, 2:16 PM
    • BHP Billiton (BHP -0.6%) is reiterated with a Market Perform rating but a reduced target price of ~$63 vs. $73 earlier at Bernstein, which calls the mining giant a “colossus with feet of clay."
    • Despite BHP's impressive portfolio of high quality assets, "this is not enough [for] a premium rating to a company that must place a premium rating on [its] products... something that BHP appears to be unwilling to do, preferring a strategy of volume over price.
    • Bernstein also does not believe BHP can afford to increase its dividend except through an increase in gearing, which makes it different from Australian peer Rio Tinto (RIO -2.7%) - neverthless, RIO is downgraded to Underperform from Buy at BofA Merrill Lynch on lower iron ore prices.
    • Vale (VALE -1.5%) also sees its stock price target lowered, to $10 from $12 at RBC, amid the subdued outlook for iron ore and near-term funding challenges.
    | 6 Comments
  • Dec. 2, 2014, 11:46 AM
    • Vale (VALE -1.4%) announces plans to invest $10.2B next year, a 26% drop from this year’s budget and the fourth consecutive year in which it has cut its capital expenditures.
    • The world's largest iron ore miner plans to spend $6.4B on new projects and $3.8B to maintain existing operations; it expects 2015 iron ore production to rise to 340M metric tons, nickel output to climb to 303K tons while copper is seen rising to 449K tons.
    • Vale joins Rio Tinto and BHP Billiton in cutting expenses as Chinese demand cools and iron ore prices drop to ~$70/ton from nearly twice that amount a year ago.
    • CEO Murilo Ferreira confirms the company is considering an IPO of a minority stake in its base metals business, but would not conduct an IPO at any price.
    | 2 Comments
  • Dec. 2, 2014, 7:44 AM
    • Vale (NYSE:VALE) is considering an IPO for part of its global base metals business as it looks to fund capital projects amid a collapse in iron ore prices, Reuters reports.
    • Vale could outline a plan to list a new entity in Toronto and London as early as today at an investor day event being held in New York.
    • UBS estimates that it costs Vale $67 to produce one metric ton of iron ore and get it to China, a tight squeeze as the company looks to complete its $20B S11D iron ore project in Brazil.
    | 3 Comments
  • Dec. 1, 2014, 11:38 AM
    • BHP Billiton (BHP -1.5%) iron ore president Jimmy Wilson said this weekend that plunging iron ore prices had been anticipated given their forecasts that supply growth would exceed the growth in demand, and signals there will be no slowdown in the drive to boost production by global iron ore producers.
    • “Even the iron ore price where it is today can induce more volume,” Wilson told Australia’s Nine Network, and "if that volume doesn’t come from our business, it’s going to come from other businesses around the world and other countries around the world.”
    • Bernstein analyst Paul Gait recently said: "If BHP do not value the products that they mine but are quite happy to dump them on the market whatever the price, then it is hard to see why anyone should value the company associated with such activity."
    • Also: RIO -0.2%, VALE -3.4%, CLF -7.6%.
    | 1 Comment
  • Nov. 25, 2014, 12:31 PM
    • Brazil Pres. Rousseff reportedly will appoint former treasury secretary Joaquim Levy as finance minister later this week, a move that has moved major Brazilian stocks higher although the move had been anticipated.
    • Levy, head of Bradesco Asset Management, is considered a fiscal hawk who helped Brazil obtain its investment credit grade as treasury secretary; he will replace Guido Mantega, who said he will step down for personal reasons.
    • PBR +1.8%, VALE +0.4%, BBD +0.7%, BSBR +5%, ITUB +0.5%, GOL +1.3%.
    • ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
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  • Nov. 25, 2014, 8:58 AM
    • Iron ore trades below $70 for the first time in five years, as rising low-cost supplies by the world’s top miners widen a global glut amid slowing demand from China.
    • Ore with 62% content delivered to Qingdao fell 1.2% to $69.58/dry metric ton, the lowest since June 2009, and has dropped 48% YTD.
    • “The biggest problem is on the supply side as majors like BHP and Rio are pushing huge volumes into the lackluster demand environment," says Bernstein's Paul Gait, who adds that $65 "feels like a floor."
    • BHP -1.8%, VALE -0.6%, RIO -0.4% premarket.
    | 1 Comment
  • Nov. 21, 2014, 10:06 AM
    • Petrobras (PBR +7.2%) and Vale (VALE +9.6%) surge higher in anticipation that Brazil may appoint a new market-friendly finance minister today, perhaps signaling a shift away from the leftist, interventionist policies blamed for Brazil's stagnant economic growth in recent years.
    • One of three reported finalists for the job is University of Chicago-trained Joaquim Levy, CEO of Bradesco Asset Management, an arm of Banco Bradesco (BBD +4.9%); he is considered a fiscal hawk who helped Brazil obtain its investment credit grade in a previous stint at treasury secretary.
    • The other contenders are said to be central bank president Alexandre Tombini and Nelson Barbosa.
    • Also: ITUB +3.8%, BSBR +2.9%, GOL +4.6%.
    • ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
    | 1 Comment
  • Nov. 21, 2014, 9:13 AM
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  • Nov. 18, 2014, 12:49 PM
    • Iron ore extends its tumble deeper into five-year lows as declining home prices in China add to worries that an economic slowdown in iron ore's biggest buyer will deepen and exacerbate an oversupply.
    • Ore with 62% content delivered to Qingdao, China, has retreated 47% YTD to $71.80 a dry ton, and Citigroup thinks prices may drop to less than $60/ton next year as output rises further and demand remains weak; China’s bad loans climbed in Q3 by the most since 2005, while new-home prices declined, adding to speculation the cooling economy will weaken further.
    • VALE -2.9%, RIO -1.9%, BHP -1.1%, CLF -6%, X -1.4%, AKS -1.9%.
    | 2 Comments
  • Nov. 11, 2014, 12:52 PM
    • Vale (VALE -2.5%) tumbles to eight-year lows after Citigroup recommends selling the stock on falling expectations for iron ore prices.
    • Citi's global commodity team downgrades shares to Sell from Neutral as it cuts its forecast for iron ore prices in 2015 and 2016 by 19% to $65/ton.
    • Citi sees Vale generating $7.5B in operating cash flow next year, which the firm says is insufficient to cover planned investments, and expects the company to defer maintenance capex, sell more assets and increase net debt.
    | 15 Comments
  • Nov. 10, 2014, 8:56 AM
    • Rio Tinto (NYSE:RIO) CEO Sam Walsh tells Reuters he is unfazed by plunging ore prices, believing his company's industry-low production costs of $20.40/metric ton in H1 2014 will help it ride out the storm.
    • Walsh also says he is confident of increasing returns to shareholders at full-year results in February, adding that RIO has no plans to cut its 2015 capital spending target of $8B, announced last year.
    • RIO is on track to increase output 9% to 290M metric tons ahead of a push to 360M metric tons, ranking it second in size behind VALE and far ahead of third-place BHP.
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  • Nov. 7, 2014, 10:58 AM
    • Iron ore prices cap their biggest weekly decline in more than five months and its third straight week of losses amid an expanding global surplus.
    • Ore with 62% content delivered to Qingdao lost 4.7% this week to $75.84/dry metric ton, data from Australia's Port Hedland showed record iron ore exports last month, and steel mill closures ordered by China this week to curb air pollution for a global summit also was seen hurting demand.
    • Iron ore has lost 44% YTD as producers including Vale (VALE +3.2%), BHP Billiton (BHP +3.7%) and Rio Tinto (RIO +2.6%) expanded supplies, and ABN Amro's Ben Cheung does not expect the oversupply situation to be alleviated next year.
    • Vale, which is seeking to boost output by 50%, this week opened its $1.4B port in Malaysia where its Valemax vessels can unload cargoes for onward shipping to clients in Asia in smaller vessels.
    | 4 Comments
  • Oct. 30, 2014, 9:32 AM
    | 1 Comment
  • Oct. 30, 2014, 7:59 AM
    • Vale (NYSE:VALE) -6% premarket after reporting a surprising Q3 net loss due a sharp depreciation in the Brazilian real and the lowest iron ore prices since 2010.
    • Vale posted a $1.44B Q3 loss from a net profit of $3.5B a year earlier and analyst consensus expectations for a $1.49B net profit, hit by $2.68B in foreign exchange and monetary losses on debt and derivatives; EBITDA fell 48% Y/Y to $3B.
    • Vale’s average sales price for iron ore plunged 36% Y/Y to $68.02/ton from $109.93.
    • Produced a record 85.7M metric tons of iron ore but inventories rose by 9.3M tons, as protests that closed its main railroad in northern Brazil contributed to stockpiles.
    • Since ferrous metals, mostly iron ore, account for nearly two-thirds of Vale’s sales, Q3 net revenues sank 27% Y/Y to $9.06B, the company's lowest revenue since Q1 2010 and below expectations of $9.65B.
    • Says it completed construction of its 30M tons/year Teluk Rubiah distribution center in Malaysia, which will allow it to cut costs in Asia, and began operations from its Serra Leste iron ore plant at the Carajas complex in Brazil.
    | 5 Comments
  • Oct. 28, 2014, 2:24 PM
    • "I think we'd be crazy not to," says Jim Chanos, still short Brazil, but taking some profits after a near 20% dive in the Bovespa over the last couple of months which may or may not have had its denouement in yesterday's post-election plunge.
    • Among the individual names Chanos had in the past talked about being short were Petrobas (PBR +4.3%) and Vale (VALE +0.6%), from which the Bovespa is heavily weighted. The two combine to represent about 8% of the assets in the iShares MSCI Brazil Capped ETF (EWZ +5.6%).
    • "I think a lot of [Rousseff's reelection] is priced in already now," says Chanos.
    • ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, BRZS, DBBR, FBZ
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Company Description
Vale SA is a metals & mining company. It produces & supplies iron ore, iron ore pellets, nickel, manganese ore, ferroalloys, copper, coal, phosphates, potash, cobalt & others.
Industry: Steel & Iron
Country: Brazil